Wednesday, December 18, 2013

Steven Maguire
Acting Section Research ManagerThis report addresses several options being considered by Congress to
address the financing needs of local communities for wastewater and
drinking water infrastructure projects and to decrease or close the gap
between available funds and projected needs. Some of the options exist and
are well established, but they are under discussion for expansion or
modification. Other innovative policy options for water infrastructure
have recently been proposed, especially to supplement or complement
existing financing tools. Some are intended to provide robust, longterm revenue
to support existing financing programs and mechanisms. Some are intended to encourage
private participation in furnishing drinking water and wastewater services.

Six options that are reflected in recent legislative proposals, including
budgetary implications, are discussed.

• Increase funding for the State Revolving Fund (SRF) programs in the Clean Water
Act (H.R. 1877 in the 113th Congress) and the Safe Drinking Water Act (H.R. 5320 in the 111th Congress),

• Lift private activity bond restrictions on water infrastructure projects
(included in the Administration’s FY2014 budget request and S. 939 and
H.R. 1802 in the 112th Congress), and

• Reinstate authority for the issuance of Build America Bonds (included in the Administration’s
FY2014 budget request and H.R. 535 and H.R. 789 in the 113th Congress).

A number of these issues and options were examined in hearings by House and
Senate committees in the 112th Congress. Legislation to create a WIFIA program (S. 601) has been passed
by the Senate and is being considered by a House-Senate conference committee.

Consensus exists among many stakeholders—state and local governments, equipment manufacturers
and construction companies, and environmental advocates—on the need for more investment
in water infrastructure. There is no consensus supporting a preferred option or
policy, and many advocate a combination that will expand the financing “toolbox”
for projects. Some of the options discussed in this report may be helpful,
but there is no single method that will address needs fully or close the
financing gap completely. For example, some may be helpful to projects in
large urban or multi-jurisdictional areas, while others may be more beneficial
in smaller communities. It is unlikely that any of the recently proposed
options could be up and running quickly, meaning that, at least for the
near term, communities will continue to rely on the existing SRF programs,
tax-exempt governmental bonds, and tax-exempt private activity bonds to finance their
water infrastructure needs.

Friday, December 13, 2013

James E. McCarthy
Specialist in Environmental PolicyAs President Obama announced initiatives addressing climate change on June
25, 2013, a major focus of attention was the prospect of greenhouse gas
(GHG) emission standards for fossilfueled— mostly coal-fired—electric
generating units (EGUs). EGUs (more commonly referred to as power plants)
are the largest anthropogenic source of greenhouse gas emissions, accounting
for about one-third of total U.S. GHGs. If the country is going to reduce
its GHG emissions by significant amounts, as the President has committed
to do, emissions from these sources will almost certainly need to be
controlled.

The President addressed this issue by directing EPA to re-propose GHG emission
standards for new EGUs by September 20, 2013. He also directed the agency
to propose guidelines for existing power plants by June 2014, and finalize
them a year later.

EPA had already proposed standards for new sources in April 2012, but the
public comment period had generated more than 2.5 million comments—the
most ever for a proposed EPA rule— and the agency had not yet finalized
the rule.

The re-proposed standards were released September 20. They would set an
emissions limit of 1,100 pounds of carbon dioxide (CO2) per megawatt-hour (MWh)
of electricity generated by new coal-fired EGUs, and a standard of either
1,000 or 1,100 lbs/MWh (depending on size) for new natural gas-fired
plants. Coal-fired plants would find it impossible to meet the standard without controls
to capture, compress, and store underground about 40% of the CO2 they produce—a technology
referred to as carbon capture and storage (CCS).

Under the Clean Air Act, the EPA Administrator has a great deal of flexibility
in setting these standards. The statute requires that New Source
Performance Standards (NSPS) reflect the degree of emission limitation
achievable through application of the best system of emission reduction that
has been “adequately demonstrated.” The Administrator can take costs, health
impacts, environmental impacts, and energy requirements into account in
determining what has been adequately demonstrated.

Many in the electric power and coal industries maintain that CCS has not been
adequately demonstrated. Given the high cost and energy use of CCS
components, they view the re-proposed standards as effectively prohibiting
the construction of new coal-fired power plants.

EPA, on the other hand, states that the components of CCS technology have been
demonstrated on numerous facilities. Details are provided in the preamble
to the proposed rule. Despite this, the agency concludes that no
coal-fired EGUs (other than DOE-sponsored or other demonstration projects)
will be built in the next 10 years regardless of whether the rule is finalized,
and therefore no units will be required to use CCS before EPA must review
the standard. Given the projected low cost and abundance of natural gas,
all new fossil-fueled units are likely to be powered by gas, according to
EPA. The standard proposed for these facilities (combined cycle natural gas
units) can be met without add-on emission controls, according to the
agency.

Although the September 20 proposal would only affect new EGUs, the potential
impacts of the rule’s issuance extend beyond these sources, because the
agency is obligated under Section 111(d) of the Clean Air Act to
promulgate guidelines for existing sources within a category when it promulgates
GHG standards for new sources. The President directed EPA to propose
such guidelines by June 2014 and to finalize them a year later. Using
these guidelines, states will berequired to develop performance standards for existing sources. These could
be less stringent than the NSPS—taking into account, among other factors,
the remaining useful life of the existing source—but the standards could
have far greater impact than the NSPS, given that they will affect all
existing sources.

Many in Congress oppose GHG emission standards. In the 113th Congress, hearings have
been held and several bills to prohibit or limit EPA GHG standards have
been introduced. The proposed standards have stirred new interest in
congressional action.

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Tuesday, December 10, 2013

Richard K. Lattanzio
Analyst in Environmental PolicyClimate change policies at both the national and international levels have
traditionally focused on measures to mitigate greenhouse gas (GHG)
emissions and to adapt to the actual or anticipated impacts of changes in
the climate. As a participant in several international agreements on climate change,
the United States has joined with other nations to express concern about
climate change. Some recent technological advances and hypotheses,
generally referred to as “geoengineering” technologies, have created
alternatives to traditional approaches to mitigating climate change. If deployed,
these new technologies could modify the Earth’s climate on a large scale.
Moreover, these new technologies may become available to foreign
governments and entities in the private sector to use unilaterally—without
authorization from the United States government or an international
treaty—as was done in the summer of 2012 when an American citizen conducted an ocean
fertilization experiment off the coast of Canada.

The term “geoengineering” describes an array of technologies that aim, through
large-scale and deliberate modifications of the Earth’s energy balance, to
reduce temperatures and counteract anthropogenic climate change. Most of
these technologies are at the conceptual and research stages, and their
effectiveness at reducing global temperatures has yet to be proven. Moreover, very
few studies have been published that document the cost, environmental effects,
sociopolitical impacts, and legal implications of geoengineering. If
geoengineering technologies were to be deployed, they are expected to have
the potential to cause significant transboundary effects.

In general, geoengineering technologies are categorized as either a carbon
dioxide removal (CDR) method or a solar radiation management (SRM) method.
CDR methods address the warming effects of greenhouse gases by removing
carbon dioxide (CO2) from the atmosphere. CDR methods include ocean fertilization, and
carbon capture and sequestration. SRM methods address climate change by
increasing the reflectivity of the Earth’s atmosphere or surface. Aerosol
injection and space-based reflectors are examples of SRM methods. SRM methods
do not remove greenhouse gases from the atmosphere, but can be deployed faster
with relatively immediate global cooling results compared to CDR methods.

To date, there is limited federal involvement in, or oversight of,
geoengineering. However, some states as well as some federal agencies,
notably the Environmental Protection Agency, Department of Energy,
Department of Agriculture, and the Department of Defense, have taken actions
related to geoengineering research or projects. At the international level,
there is no international agreement or organization governing the full spectrum
of possible geoengineering activities. Nevertheless, provisions of many
international agreements, including those relating to climate change,
maritime pollution, and air pollution, would likely inform the types of geoengineering
activities that state parties to these agreements might choose to pursue. In
2010, the Convention on Biological Diversity adopted provisions calling
for member parties to abstain from geoengineering unless the parties have
fully considered the risks and impacts of those activities on
biodiversity.

With the possibility that geoengineering technologies may be developed and that
climate change will remain an issue of global concern, policymakers may
determine whether geoengineering warrants attention at either the federal
or international level. If so, policymakers will also need to consider
whether geoengineering can be effectively addressed by amendments to existing
laws and international agreements or, alternatively, whether new laws and
international treaties would need to be developed.

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